Moral Outrage
Whew! God help us!

Federal subsidy renovates luxury hotel in Chicago

The landmark Blackstone Hotel in downtown Chicago, which has hosted 12 U.S. presidents, opened in 2008 after a two-year, $116 million renovation. Inside the Beaux Arts structure, buffed marble staircases greet guests spending up to $699 a night for rooms with views of Lake Michigan.

What’s surprising isn’t the opulent makeover: It’s how the project was financed. The work was subsidized by a federal development program intended to help poor communities.

Renovation at the Blackstone Hotel qualified for a federal subsidy due to the neighborhood’s 26 percent poverty rate.

The biggest beneficiary of taxpayer help for the Blackstone revamp was Prudential Financial Inc., the second-largest U.S. life insurer. The company got $15.6 million in tax credits from the U.S. Department of the Treasury for helping to fund the project, according to Chicago city records, Bloomberg Markets magazine reports in its March issue.

JPMorgan Chase & Co., the second-largest U.S bank by assets, also took in money by serving as a lender and the monitor of Blackstone construction financing, city records show.

Since 2003, some of the world’s biggest financial companies, including Goldman Sachs Group Inc., U.S. Bancorp, JPMorgan Chase and Prudential, have taken advantage of a federal subsidy that will cost taxpayers $10.1 billion — and most of the public has never heard of it.

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